MARUTI UDYOG LIMITED Vs. COLLECTOR OF CENTRAL EXCISE

JUDGEMENT

(1.) THE above appeal arises out of the order dated 24 -12 -1996 passed by the Collector of Central Excise, New Delhi by which he has confirmed a duty demand of Rs. 26,59,620/ - on 850 Trollies, 4,710 Bins and 330 Pallets of iron and steel manufactured by the appellants during the period May, 1989 to March, 1992 through fabricators by supplying fabricated materials and imposed a penalty of an equal amount under Rule 173Q of the Central Excise Rules read with Section 11AC of the Central Excise Act, 1944.

(2.) THE brief facts of the case are that the appellants supply raw material for the manufacture of the above mentioned three items which are in the nature of material handling equipment to the following fabricators who fabricated the same in the appellants, premises :

(3.) THE appellants' claim to he benefit of Notification No. 217/86, dated 2 -4 -1986 was denied by the Adjudicating authority for the reason inter alia that items of the category of material handling equipment were excluded under the Explanation to the Notification. The plea that the fabricators above named are the real manufacturers was rejected, holding that the fabricators were only in the nature of hired labourers and that the appellants were the real manufacturers of the Trollies, Bins and Pallets. By order dated 26 -5 -1995, the Collector of Central Excise, Delhi confirmed a duty demand of Rs. 26,59,620/ - (the duty demand in the show cause notice was reduced after accepting the appellants' contention that quantification of duty is to be made by taking the margin of profit at the rate of 4.25%, 3.23% and 1.87% for the period 1989 -90,1990 -91 and 1991 -92 respectively). Penalty of Rs. 4 lakhs was imposed under Rule 173Q.